Building Permits Up 98% In State

Outlook For Home Building Brightens In State, U.s.

February 20, 1992|By WILLIAM HATHAWAY; Courant Staff Writer

Developers in Connecticut took out twice as many residential building permits in January as they did a year earlier, increasing the optimism of economists that the state's worst building slump in decades is abating.

In a separate announcement Wednesday, the U.S Commerce Department said housing starts nationally jumped 5.5 percent in January, to a seasonally -adjusted annual rate of construction of 1.17 million, the highest level in 20 months.

The two statistics were good news for economists, who look to housing starts and building permit figures to forecast the course of the economy. Historically, the housing industry is one of the first hit by a recession and is one of the first segments of the economy to recover. Home building spurs demand for other durable goods such as appliances, helping other industries out of their doldrums.

The state Department of Housing announced Wednesday that the 507 permits issued in Connecticut this past January is a 98 percent increase over the 256 permits issued in January of 1991, one of the worst months for permits the since the construction market began its devastating collapse of the construction market began in 1987.

Since the spring of 1991, the number of building permits issued each month in the state have has shown a small but consistent increases when compared to with the prior year's monthly totals.

"The numbers are further evidence that the residential housing market hit bottom in 1991 and we're in for a modest rebound," said Donald L. Klepper-Smith, an economist for SNET.Southern New England Telecommunications.

But the overall gains in housing activity so far is are short of what is needed to substantially boost Connecticut's staggering economy, he added.

"The economic realities of the '90s dictate that the Connecticut market will grow inch by inch rather than by the yard," Klepper-Smith said. "Enthusiasms must be tempered against the fact that jobs are scarce, real personal income will probably rise only fractionally, and regional confidence remains soft."

The January gain in national housing starts followed a 1.9

percent increase in December. The figure for housing starts records -- , which a record actual construction rather than an the intent to build as do reflected in building permit numbers. , -- followed a 1.9 percent increase in December. Overall starts were down everywhere but the Midwest, where they rose 33.9 percent to a seasonally adjusted annual rate of 324,000 units, the highest in two years. They had risen 9.5 percent in December.

In other regions, starts fell 7.6 in the Northeast to a rate of 134,000 units, 0.9 percent in the South to 459,000 units and 2.3 percent in the West to 250,000 units.

In a hopeful sign for the future, applications for building permits jumped 6 percent in January to 1.12 million units, following a 6.2 percent gain in December.

Economists say lower mortgage rates are behind the upturn. Rates fell through most of last year, hitting a 19-year low early in January before rising somewhat since.

Analysts are counting on continued strength in housing to ensure recovery from the recession that began in July 1990. Housing starts last year totaled just 1.01 million, a 14.9 percent drop from 1990 and the worst showing in 46 years.